Highlights
- Net business wins in the quarter of $2,328 million. Reflects a
net book to bill in the quarter of 1.15, and a trailing twelve
month net book to bill of 1.21.
- Closing backlog of $24.3 billion, an increase of 2.1% on
quarter two 2024 and 9.4% on quarter three 2023.
- Quarter three revenue of $2,030.0 million. Quarter three
adjusted EBITDA of $418.8 million or 20.6% of revenue.
- GAAP net income for the quarter of $197.1 million or $2.36 per
diluted share, an increase of 19.8% on quarter three 2023 diluted
earnings per share.
- Quarter three adjusted net income was $279.2 million or $3.35
per diluted share, an increase of 1.5% on quarter three 2023
adjusted diluted earnings per share.
- Net debt balance of $2.7 billion at September 30, 2024 with net
debt to adjusted EBITDA ratio of 1.6x.
- Cash generated from operating activities for the quarter was
$402.7 million, an increase of 17.9% on quarter three 2023.
- $100.0 million worth of stock repurchased at an average price
of $297.
- Updating full-year 2024 financial revenue guidance in the range
of $8,260 - $8,300 million, representing a year over year increase
of 1.7% to 2.2%. Updating full-year 2024 adjusted earnings per
share* guidance in the range of $13.90 - $14.10, representing a
year over year increase of 8.7% to 10.2%. Adjusted earnings per
share to exclude amortization, stock compensation, restructuring,
foreign exchange and transaction-related / integrated-related
adjustments.
ICON plc (NASDAQ: ICLR), a world-leading healthcare intelligence
and clinical research organization, today reported its financial
results for the third quarter ended September 30, 2024.
CEO, Dr. Steve Cutler commented, “ICON’s results for the third
quarter did not meet the expectations we had previously provided
due to specific customer and division-level impacts. Our revenue
shortfall was attributable to more material headwinds from two
large customers undergoing budget cuts and changes in their
development model, lower than anticipated vaccine-related activity,
and ongoing cautiousness from biotech customers resulting in award
and study delays.
We expect these impacts to continue into quarter four, and as a
result, we are taking decisive action to realign our resources to
forecasted activity. With these actions, we are updating our full
year adjusted earnings per share guidance to between $13.90 and
$14.10, representing year over year growth of 8.7% to 10.2%.
The fundamentals of our business remain strong and we saw
further success in the quarter with a new top 10 pharma strategic
partnership win, which has already started contributing to our
pipeline of awards. This win, coupled with other recently executed
partnerships, supports our outlook for growth over the medium
term.”
Third Quarter 2024 Results
Gross business wins in the third quarter were $2,832 million and
cancellations were $504 million. This resulted in net business wins
of $2,328 million and a book to bill of 1.15.
Revenue for the third quarter was $2,030 million. This
represents a decrease of 1.2% on prior year revenue or 1.0% on a
constant currency basis.
GAAP net income was $197.1 million resulting in $2.36 diluted
earnings per share in quarter three 2024 compared to $1.97 diluted
earnings per share in quarter three 2023, an increase of 19.8% year
over year. Adjusted net income for the quarter was $279.2 million
resulting in an adjusted diluted earnings per share of $3.35
compared to $3.30 per share for the third quarter 2023.
Adjusted EBITDA for the third quarter was $418.8 million or
20.6% of revenue, a year-on-year decrease of 3.2%.
The effective tax rate on adjusted net income in quarter three
2024 was 16.5%.
Cash generated from operating activities for the quarter was
$402.7 million. During the quarter $43.3 million was spent on
capital expenditure. At September 30, 2024, the Group had cash and
cash equivalents of $695.5 million, compared to cash and cash
equivalents of $506.6 million at June 30, 2024 and $313.1 million
at September 30, 2023. $100.0 million worth of stock was
repurchased at an average price of $297. $50.0 million of the
revolving credit facility was drawn down in the quarter and $50.0
million was repaid. Additionally, $7.4 million of Term Loan B
payments were made during the quarter. Net indebtedness as at
September 30, 2024 was $2.7 billion.
Year to date 2024 Results
Gross business wins year to date were $9,017 million and
cancellations were $1,457 million. This resulted in net business
wins of $7,560 million and a book to bill of 1.21.
Year to date revenue was $6,240.6 million. This represents a
year on year increase of 3.1% or 3.2% on a constant currency
basis.
GAAP net income year to date was $531.5 million resulting in
$6.38 diluted earnings per share compared to $4.79 per share for
the equivalent prior year period. This represents an increase of
33.2%. Adjusted net income was $880.3 million resulting in an
adjusted diluted earnings per share of $10.57 compared to $9.31 per
share for the equivalent prior year period. This represents an
increase of 13.5%.
Adjusted EBITDA year to date was $1,313.2 million or 21.0% of
revenue, a year on year increase of 5.4%.
Other Information
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this press
release contains certain non-GAAP financial measures, including
adjusted EBITDA, adjusted net income and adjusted diluted earnings
per share. Adjusted EBITDA, adjusted net income and adjusted
diluted earnings per share exclude amortization, stock
compensation, foreign exchange gains and losses, restructuring and
transaction-related / integration-related adjustments. While
non-GAAP financial measures are not superior to or a substitute for
the comparable GAAP measures, ICON believes certain non-GAAP
information is useful to investors for historical comparison
purposes.
ICON will hold a conference call on October 24, 2024 at 08:00
EDT [13:00 Ireland & UK]. This call and linked slide
presentation can be accessed live from our website at
http://investor.iconplc.com. A recording will also be available on
the website for 90 days following the call. In addition, a calendar
of company events, including upcoming conference presentations, is
available on our website, under “Investors”. This calendar will be
updated regularly.
This press release contains forward-looking statements,
including statements about our financial guidance. These statements
are based on management's current expectations and information
currently available, including current economic and industry
conditions. These statements are not guarantees of future
performance or actual results, and actual results, developments and
business decisions may differ from those stated in this press
release. The forward-looking statements are subject to future
events, risks, uncertainties and other factors that could cause
actual results to differ materially from those projected in the
statements, including, but not limited to, the ability to enter
into new contracts, maintain client relationships, manage the
opening of new offices and offering of new services, the
integration of new business mergers and acquisitions, as well as
other economic and global market conditions and other risks and
uncertainties detailed from time to time in SEC reports filed by
ICON, all of which are difficult to predict and some of which are
beyond our control. For these reasons, you should not place undue
reliance on these forward-looking statements when making investment
decisions. The word "expected" and variations of such words and
similar expressions are intended to identify forward-looking
statements. Forward-looking statements are only as of the date they
are made and we do not undertake any obligation to update publicly
any forward-looking statement, either as a result of new
information, future events or otherwise. More information about the
risks and uncertainties relating to these forward-looking
statements may be found in SEC reports filed by ICON, including its
Form 20-F, F-1, F-4, S-8, F-3 and certain other reports, which are
available on the SEC's website at http://www.sec.gov.
* Our full-year 2024 guidance adjusted earnings per share
measures are provided on a non-GAAP basis because the company is
unable to predict with a reasonable degree of certainty certain
items contained in the GAAP measures without unreasonable efforts.
For the same reasons, the company is unable to address the probable
significance of the unavailable information.
ICON plc is a world-leading healthcare intelligence and clinical
research organization. From molecule to medicine, we advance
clinical research providing outsourced services to pharmaceutical,
biotechnology, medical device and government and public health
organizations. We develop new innovations, drive emerging therapies
forward and improve patient lives. With headquarters in Dublin,
Ireland, ICON employed approximately 42,250 employees in 106
locations in 55 countries as at September 30, 2024. For further
information about ICON, visit: www.iconplc.com.
ICON/ICLR-F
ICON plc
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023
(UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands except share and
per share data)
Revenue
$
2,030,030
$
2,055,099
$
6,240,575
$
6,053,928
Costs and expenses:
Direct costs (excluding depreciation and
amortization)
1,438,616
1,449,136
4,403,583
4,274,222
Selling, general and administrative
205,095
185,187
576,903
572,999
Depreciation and amortization
93,029
146,032
391,845
436,217
Transaction and integration related
7,856
10,433
21,667
34,516
Restructuring
—
—
45,789
45,390
Total costs and expenses
1,744,596
1,790,788
5,439,787
5,363,344
Income from operations
285,434
264,311
800,788
690,584
Interest income
2,434
1,273
5,601
3,294
Interest expense
(53,303
)
(83,908
)
(185,808
)
(255,665
)
Income before income tax expense
234,565
181,676
620,581
438,213
Income tax expense
(37,437
)
(18,011
)
(89,105
)
(41,913
)
Income before share of losses from equity
method investments
197,128
163,665
531,476
396,300
Share of losses from equity method
investments
—
—
—
(383
)
Net income
$
197,128
$
163,665
$
531,476
$
395,917
Net income per Ordinary Share:
Basic
$
2.38
$
1.99
$
6.43
$
4.83
Diluted
$
2.36
$
1.97
$
6.38
$
4.79
Weighted average number of Ordinary Shares
outstanding:
Basic
82,831,300
82,215,627
82,716,842
82,001,500
Diluted
83,445,827
82,972,888
83,305,441
82,737,073
ICON plc
CONDENSED CONSOLIDATED BALANCE
SHEETS
AS AT SEPTEMBER 30, 2024 AND
DECEMBER 31, 2023
(UNAUDITED)
September 30,
2024
December 31,
2023
ASSETS
(in thousands)
Current assets:
Cash and cash equivalents
$
695,507
$
378,102
Available for sale investments
—
1,954
Accounts receivable, net of allowance for
credit losses
1,396,080
1,790,322
Unbilled revenue
1,361,198
951,936
Other receivables
82,760
65,797
Prepayments and other current assets
140,536
132,105
Income taxes receivable
102,931
91,254
Total current assets
$
3,779,012
$
3,411,470
Non-current assets:
Property, plant and equipment
365,726
361,184
Goodwill
9,085,447
9,022,075
Intangible assets
3,605,814
3,855,865
Operating right-of-use assets
156,955
140,333
Other receivables
88,445
78,470
Deferred tax asset
75,993
73,662
Investments in equity
53,720
46,804
Total Assets
$
17,211,112
$
16,989,863
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
106,172
$
131,584
Unearned revenue
1,585,257
1,654,507
Other liabilities
1,045,134
915,399
Income taxes payable
52,585
13,968
Current bank credit lines, loan facilities
and notes
29,762
110,150
Total current liabilities
$
2,818,910
$
2,825,608
Non-current liabilities:
Non-current bank credit lines, loan
facilities and notes
3,402,368
3,665,439
Lease liabilities
145,714
126,321
Non-current other liabilities
50,157
45,998
Non-current income taxes payable
201,135
186,654
Deferred tax liability
818,329
899,100
Commitments and contingencies
—
—
Total Liabilities
$
7,436,613
$
7,749,120
Shareholders' Equity:
Ordinary shares, par value 6 euro cents
per share; 100,000,000 shares authorized,
82,559,366 shares issued and outstanding
at September 30, 2024 and
82,495,086 shares issued and outstanding
at December 31, 2023
6,703
6,699
Additional paid‑in capital
7,011,547
6,942,669
Other undenominated capital
1,184
1,162
Accumulated other comprehensive loss
(110,062
)
(143,506
)
Retained earnings
2,865,127
2,433,719
Total Shareholders' Equity
$
9,774,499
$
9,240,743
Total Liabilities and Shareholders'
Equity
$
17,211,112
$
16,989,863
ICON plc
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023
(UNAUDITED)
Nine Months Ended
September 30,
2024
September 30,
2023
(in thousands)
Cash flows provided by operating
activities:
Net income
$
531,476
$
395,917
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
391,845
436,217
Impairment of operating right-of-use
assets and related property, plant and equipment
12,559
8,845
Reduction in carrying value of operating
right-of-use assets
29,820
33,979
Loss on equity method investments
—
383
Acquisition-related gain
—
(6,160
)
Amortization of financing costs and debt
discount
22,066
12,485
Stock compensation expense
41,183
47,303
Deferred tax benefit
(86,579
)
(114,487
)
Unrealized foreign exchange movements
34,018
(7,670
)
Other non-cash items
26,828
21,966
Changes in operating assets and
liabilities:
Accounts receivable
352,795
(139,096
)
Unbilled revenue
(423,533
)
14,370
Unearned revenue
(72,930
)
158,269
Other net assets
88,790
(141,425
)
Net cash provided by operating
activities
948,338
720,896
Cash flows used in investing
activities:
Purchase of property, plant and
equipment
(106,772
)
(87,980
)
Purchase of subsidiary undertakings (net
of cash acquired)
(85,629
)
(5,100
)
Movement of available for sale
investments
1,954
(241
)
Proceeds from investments in equity
2,671
—
Purchase of investments in equity
(10,131
)
(10,829
)
Net cash used in investing activities
(197,907
)
(104,150
)
Cash flows used in financing
activities:
New Notes issue costs
(12,678
)
—
Drawdown of credit lines and loan
facilities
2,242,480
305,000
Repayment of credit lines and loan
facilities
(2,595,323
)
(930,000
)
Proceeds from exercise of equity
compensation
32,379
36,517
Share issue costs
(17
)
(14
)
Repurchase of ordinary shares
(100,000
)
—
Share repurchase costs
(68
)
—
Net cash used in financing activities
(433,227
)
(588,497
)
Effect of exchange rate movements on
cash
201
(3,952
)
Net increase in cash and cash
equivalents
317,405
24,297
Cash and cash equivalents at beginning of
period
378,102
288,768
Cash and cash equivalents at end of
period
$
695,507
$
313,065
ICON plc
RECONCILIATION OF NON-GAAP
MEASURES
FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023
(UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
(in thousands except share and
per share data)
Adjusted EBITDA
Net income
$
197,128
$
163,665
$
531,476
$
395,917
Share of losses from equity method
investments
—
—
—
383
Income tax expense
37,437
18,011
89,105
41,913
Net interest expense
50,869
82,635
180,207
252,371
Depreciation and amortization
93,029
146,032
391,845
436,217
Stock-based compensation expense (a)
13,038
16,465
41,183
47,822
Foreign currency losses/(gains), net
(b)
19,434
(4,706
)
11,960
(2,465
)
Oncacare (gain) (g)
—
—
—
(6,160
)
Restructuring (c)
—
—
45,789
45,390
Transaction and integration related costs
(d)
7,856
10,433
21,667
34,516
Adjusted EBITDA
$
418,791
$
432,535
$
1,313,232
$
1,245,904
Adjusted net income and adjusted
diluted net income per Ordinary Share
Net income
$
197,128
$
163,665
$
531,476
$
395,917
Income tax expense
37,437
18,011
89,105
41,913
Amortization
58,026
114,573
291,013
343,868
Stock-based compensation expense (a)
13,038
16,465
41,183
47,822
Foreign currency losses/(gains), net
(b)
19,434
(4,706
)
11,960
(2,465
)
Restructuring (c)
—
—
45,789
45,390
Oncacare (gain) (g)
—
—
—
(6,160
)
Transaction and integration related costs
(d)
7,856
10,433
21,667
34,516
Transaction-related financing costs
(e)
1,462
4,587
22,066
12,486
Adjusted tax expense (f)
(55,173
)
(49,100
)
(173,953
)
(142,617
)
Adjusted net income
$
279,208
$
273,928
$
880,306
$
770,670
Diluted weighted average number of
Ordinary Shares outstanding
83,445,827
82,972,888
83,305,441
82,737,073
Adjusted diluted net income per
Ordinary Share
$
3.35
$
3.30
$
10.57
$
9.31
(a)
Stock-based compensation expense
represents the amount of recurring expense related to the company’s
equity compensation programs (inclusive of employer related
taxes).
(b)
Foreign currency losses/(gains),
net relates to gains or losses that arise in connection with the
revaluation, or settlement, of non-US dollar denominated assets and
liabilities. We exclude these gains and losses from adjusted EBITDA
and adjusted net income because fluctuations from period- to-
period do not necessarily correspond to changes in our operating
results.
(c)
Restructuring relates to charges
incurred in connection with the company's realignments of its
workforce, with the elimination of redundant positions as well as
reviewing its global office footprint and optimizing its locations
to best fit the requirements of the company.
(d)
Transaction and integration
related costs include expenses associated with our acquisitions and
any other costs incurred directly related to the integration of
these acquisitions.
(e)
Transaction-related financing
costs includes costs incurred in connection with changes to our
long-term debt and amortization of financing fees. We exclude these
costs from adjusted EBITDA and adjusted net income because they
result from financing decisions rather than from decisions made
related to our ongoing operations.
(f)
Represents the tax effect of
adjusted pre-tax income at our estimated effective tax rate.
(g)
On April 20, 2023, the Company
completed the purchase of the majority investor’s 51% majority
voting share capital of Oncacare Limited (“Oncacare”). This gave
rise to an acquisition-related gain of $6.2 million. This gain was
excluded from adjusted EBITDA and adjusted net income.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241023957406/en/
Investor Relations +1 888 381 7923 Brendan Brennan Chief
Financial Officer Kate Haven Vice President Investor Relations +1
888 381 7923 http://www.iconplc.com
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